Ad Buyers Sure Love Vice, But Are Torn About its Valuation

Digital ad buyers are enamored with Vice Media–and they see a great fit between the media upstart and Time Warner, should the two firms figure out how to work together. As for whether Vice’s ad momentum warrants a valuation of any of the multi-billion dollar numbers that have been floated of late, that’s open to serious debate.

“Vice is definitely attractive to brands,” said Jordan Bitterman, Chief Strategy Officer at Mindshare. “They’re part of a new breed of publisher with a unique perspective and strong following.” When asked why Time Warner might be so interested in partnering with or investing in Vice, Mr. Bitterman compared such a move to Apple’s recently mega deal for Beats Electronics, which was as much about the talent involved as it was about selling headphones. “Time Warner likely isn’t in talks at these levels for short-term return on their investment. They probably see different advantages, including new creative thought leadership.”

It Time Warner does indeed invest in Vice, it won’t necessarily be because of Vice’s monster Web audience. In fact, when it comes to its digital footprint, Vice isn’t even in the same neighborhood as similarly hyped companies like BuzzFeed and Vox Media. According to comScore, Buzzfeed.com reached over 61 million unique users in April. Meanwhile, Vox’s SBNation reached 28.5 million unique users in April, while the company’s gaming site Polygon.com reached over 1.6 million unique users while the recently-launched Vox.com reached over 2.2 million uniques. Vox also owns other sites like Eater.com and Curbed.com, which are not reflected in these numbers.

Vice.com reached 7.4 million unique users in April, according to comScore (up from 4.1 million a year ago). Including all of its digital media properties (Daily Dot, OV Guide), Vice Media reached about 15.4 million unique visitors in April).

A Vice official points out that the company does not own Daily Dot and OV Guide; it sells ads for those sites as part of its network. On the other hand, Vice owns other sites such as Noisey and Motherboard that the company contends are not represented in comScore’s data.

To be sure, Vice doesn’t see itself in the same category as BuzzFeed and Vox. Instead Vice has compared itself to CNN, only for a younger generation. But on the Web, Vice isn’t even in CNN’s neighborhood. According to comScore, CNN.com reached over 112.5 million unique users across multiple platforms in April.

On YouTube, Vice does has a strong following across multiple channels. For example, Vice’s core YouTube channel claims 4.7 million subscribers and has generated over 485 million views. Vice News has over 450,000 subscribers and has generated over 44 million views.

Ok, so Maker is really a network of Web video channels. For a more apples to apples comparison, BuzzFeed, which was hardly in the Web video game a year ago, already has 2.3 million YouTube subscribers.

To be fair, Vice also has a magazine and an HBO series. And the company is trending to pull in $500 million in revenue this year, according to The Wall Street Journal. Regardless, what Vice may lack in pure audience, it more than makes up for in sex appeal for marketers. “I think Vice is the most exciting content brand on the planet,” said Adam Kleinberg, CEO of the digital agency Traction. “A brand like Buzzfeed, that is known for cat videos, can produce amazing, intelligent, provocative long-form content, but their brand still stands for cat videos. Vice on the other hand is the brand—and you have to think of it as a brand, not a publication—that stands for amazing, intelligent, provocative long-form content. There is no hotter content brand out there.”

True, Vice has been ahead of others in terms of native advertising. And its ad rates are probably on the high side in video–though that space continues to get more crowded. Do these wild valuations mesh with its ad potential? Buyers are split.

“If long–term potential and acqui-hire benefits are what they’re looking for, the valuation being discussed in the press seems high but I wouldn’t bet against them,” said Mr. Bitterman.

But Mr. Kleinberg was far more effusive in his assessment, even as he acknowledged that many traditional brands won’t touch Vice because of its perceived “controversial” content. “[The billion dollar figures] sound like a lot when you use traditional measures, but Vice is a brand designed for the digital age,” he said. “Vice charges a substantial premium for the cool factor they bring.”

CORRECTION: This post was updated to note that Vice doesn’t own Daily Dot and OV Guide; it sells ads for those sites as part of its network.

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